TaxTMI 
TaxTMI 
2022 (3) TMI 518
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....ent No.2 recovered 4652.235 gram of gold bar and cuttings. Similarly, they also seized 4563.446 gram of fine silver and 407.907 gram of silver ingots. A Panchnama which was prepared in this regard is Annexure P-1. Petitioner was arrested on 4.5.2021 and he was sent to judicial custody for a period of 60 days by the Trial Court. Thereafter, he was released on bail by the Trial Court. 3. The whole proceeding of search and seizure on the Petitioner's premises was conducted on an incident that took place on 1.5.2021 whereby two persons namely Jijoba Shankar Kadam and Ranjit Phate were intercepted at the Raipur Railway Station and from their possession a huge quantity of Silver and Gold were recovered. Subsequent to the Petitioner being released on bail, the Respondent Authorities have been issuing summons after summons to appear before the Respondents and insisting his presence for interrogation and for further proceeding in the matter. It is this seizure and summoning proceeding initiated by the Respondents which has been questioned by the Petitioner in the instant Writ Petition. 4. Petitioner has sought for the quashment of the seizure proceeding drawn by the Respondents and also s....
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....ustoms Act. 8. Learned Assistant Solicitor General also submitted that it is not that the entire proceeding just has been drawn by the DRI alone, in the team which conducted the search there was also this Officer from the Customs Department namely Shri Kujur and therefore also the proceeding cannot be said to be vitiated. 9. For better understanding of the entire issue, it would be relevant at this stage to take note of few of the provisions of the Customs Act. Section 2(34) of the Customs Act defines the "proper officer" which for ready reference is being reproduced below:- "2. Definitions.- xxx xxx xxx (34) "proper officer", in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Principal Commissioner of Customs or Commissioner of Customs." 10. Likewise, Section 6 of the Customs Act deals with the "entrustment or functions of Board and customs officers on certain other officers":- "6. Entrustment of functions of Board and customs officers on certain other officers.- The Central Government may, by notification in the Official Gazette, entrust either conditionally or unconditionally to....
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....rpose of all functions to be discharged that of the Board or any Officer of the Customs. 16. Plain reading of Section 6 itself clearly reflect that for the purpose of any Officer of the Central or the State Government other than those assigned under the Customs Act and in respect of the Officer other than the Customs Department, there has to be a specific Notification issued by the Central Government and that which has to be also notified in the Official Gazette. 17. Plain reading of Section 6 would further lead us to draw a safest of inferences that in order to initiate a proceeding under the Customs Act by an Officer or a Department other than the Officer of the Customs and the Customs Department, there has to be a specific Notification issued by the Central Government and which is also to be published in the Official Gazette. 18. In the instant case, when we peruse the pleadings, reply and the documents produced by the Respondents, the only Notification on which the Respondents have relied upon is the Notification dated 2.5.2012 which has been brought on record vide Covering Memo dated 17.2.2022. It would be relevant at this juncture to also take note of the contents of the s....
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....fficer under Section 28 of the Customs Act, Shri Sanjay Jain, learned Additional Solicitor General relied on a Notification No.40/2012 dated 2.5.2012 issued by the Central Board of Excise and Customs. The notification confers various functions referred to in Column (3) of the notification under the Customs Act on officers referred to in Column (2).... 19. It appears that a Deputy Commissioner or Assistant Commissioner of Customs has been entrusted with the functions under Section 28, vide Sl. No.3 above. By reason of the fact that the functions are assigned to officers referred to in Column (3) and those officers above the rank of officers mentioned in Column (2), the Commissioner of Customs would be included as an officer entitled to perform the function under Section 28 of the Act conferred on a Deputy Commissioner or Assistant Commissioner but the notification appears to be ill-founded. The notification is purported to have been issued in exercise of powers under sub-Section (34) of Section 2 of the Customs Act. This section does not confer any powers on any authority to entrust any functions to officers. The sub-Section is part of the definitions clause of the Act, it merely ....
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....ecently again reiterated by the Hon'ble Supreme Court in one of its very recent Order dated 20.1.2022 passed in the case of "Commissioner of Customs, Ahmedabad Vs. M/s Suncity Strips and Tubes P. Ltd." Civil Appeal No. of 2022 (Diary No. 7082/2020). The relevant Paragraphs of the said Order are also being reproduced herein below :- "2. In Canon India Private Limited vs Commissioner of Customs AIR 2021 SC 1699, a three-Judge Bench of this Court has held that in the absence of an entrustment under Section 6 of the Customs Act 1962, an officer of the Directorate of Revenue Intelligence will not have jurisdiction to exercise the functions entrusted to Customs Officers under the provisions of the Act. As a consequence of the above elucidation, the Court held that the entire proceeding which was initiated by the Additional Director General of the Directorate of Revenue Intelligence by issuing show cause notices was invalid. 3. In the present case, the notice to show cause dated 30 October 2013 raising demands under the Customs Act 1962 was issued by the Additional Director General of the Directorate of Revenue Intelligence (Zonal Unit, Ahmedabad). 4. In view of the decision o....
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.... if any, stand disposed of" 12. In the light of the decisions of the Hon'ble Supreme Court referred to herein above, we have no hesitation in holding that the entire proceedings in the present case initiated by the respondent No. 2 - Joint Director, DRI, Mumbai, by issuing the show cause notice are invalid, without any authority of law and liable to be set aside and ensuing demands are also liable to be set aside." 24. In yet another similar matter, the High Court of Delhi in the case of "M/s Rani Enterprises Vs. Principal Commissioner of Customs, ICD Pratapganj & Ors." decided on 12.10.2021 in WP(C) No.11721/2021, has in Paragraphs- 5 & 8 held as under:- "5. Learned counsel contends that Section 110 of the Customs Act, 1962 deals with seizure of goods and documents and a bare perusal of the provisions of the said Section makes it clear that the goods may be seized by 'Proper Officer' and the said term has been defined under Section 2(34) of the Customs Act, 1962. 'Proper Officer', therefore, for performing any function under the said Act means 'the officer of Customs who is assigned those functions by the Board', meaning thereby that to be a Proper Officer, the Officer mu....
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....imperative that the Central Government should have done so in exercise of its powers under Section 6 of the Act. Dealing with the notification dated 2nd May, 2012, relied upon by the respondent, which confers the various functions referred to in Column (3) of the notification under the Customs Act on officers referred to in Column (2), the Hon'ble Supreme Court held that the Section under which the notification has been issued does not confer any power on any authority to entrust any functions to the officers. It was also held that the notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act, hence was invalid." 26. Coming to the facts of the present case, admittedly, the proceeding initiated against the Petitioner is by the DRI. From the documents enclosed also, there is no dispute to the fact that the proceeding is not by the Customs Department or the officials of the Customs Department. Merely because one of the Officers in the search and seizure proceeding belongs to the Customs Department does not mean that the pr....